Today’s news headlines related to Commonwealth Bank will no doubt focus on the departure of its CEO Ian Narev, only days after he was given “full confidence,” by the Board – generally equivalent to the hanging judge reaching for his well-worn black hat.

But today also heralded the release of CommBank’s long-awaited climate change position statement, which is so devoid of useful content that it too should be sent straight to gallows.

Commonwealth Bank is barely even pretending to make an effort on climate change.

Unlike the bank’s peers in Australia and overseas that are taking concrete steps to avoid the most carbon intensive sectors, Commonwealth Bank clearly lacks either the interest or competency to fulfill its commitment to help hold global warming below two degrees.

The key points of the position statement are a commitment to make $15 billion available to “low carbon projects”, which, by the way, is less on a per annum basis than CBA’s Australian peers, and an aspirational target to reduce the average emissions intensity of the bank’s business lending portfolio.

‘Aspirational’ should generally point to some sense of ambition. Not so. Unfortunately this target could be achieved simply by lending to one solar farm.

According to Market Forces’ analysis, since Commbank made its 2015 pledge to uphold the Paris Climate Agreement, it has poured $6 billion dollars into the fossil fuel industry, more than four times the amount invested in renewable energy.

The new fossil fuel projects financed by Commonwealth Bank will produce enough CO2 over their lifetimes to cancel out Australia’s 2005-2030 emission reduction goal twice over. Undermining Australia’s efforts to reduce greenhouse gas emissions is hardly the behaviour of a major financial institution apparently on board with the goal of keeping global warming below two degrees.

Nothing in today’s statement alters this. In fact, the policy probably equates to less than the bank is already doing through its lending, which is quite a feat as the bar is so low.

Whilst the refusal to countenance funding Adani’s Carmichael project is a positive, the commitments keep the door wide open for Commonwealth Bank to continue lending to projects that expand the scale of the fossil fuel industry.

That in itself should be enough to conclude this flimsy document has no relationship with the goal of holding global warming to less than two degrees.

That’s why this week Market Forces will move a shareholder resolution that would embed climate change risk management into the heart of Commonwealth Bank.

The reality is that we can’t allow a situation to continue where Australia’s biggest company continues to finance a massive fossil fuel industry expansion while feigning interest in a safe climate future.

6 Comments

Another strike against Adani…hooray. Surely this tells The COALition and The NAIF that the $1Billions loan / gift is lunacy. If Banks won’t lend it is for commercial reasons, end of story.

John Saint-Smith 2 years ago

Most of the CBA’s exposure to fossil fuel emissions consists of investment choices, which can be transitioned as rapidly as they choose. Proudly announcing a target of ‘net zero emissions by 2050’, for a bank with almost no inherent emissions intensity in its business beyond sourcing renewable electricity for its air-conditioners, does not sound like a ‘major commitment’ to me. It is pathetic.

Joe 2 years ago

Almost as pathetic as AGL’s announcement of getting out of FF by….2049!

Calamity_Jean 2 years ago

“…AGL’s announcement of getting out of FF by….2049!”

That’s beyond pathetic.

George Darroch 2 years ago

Good job market forces. All it takes is making the investors nervous, and suddenly the directors have a much harder time greenlighting major fossil investments.

Michel Syna Rahme 2 years ago

Here is an issue: I am a COMMBANK customer for last 20 years. I would like to leave the bank if I could. Maybe we need to focus the campaign on putting pressure on each of the big 4 banks to be the first to rule out new investment in coal and unconventional gas rather than condemning one bank and leaving the heat off the other 3!

We need one of the big 4 to make this pledge, so perhaps we should all focus on that. Let’s use a positive campaign about why one of the big 4 banks should be the first to make this pledge (for a start the first mover will gain a massive BRAND advantage with the emerging generations and future borrowers – because if you think climate change is crap, I will bet my house the new generations won’t be thinking it is crap). Let’s use the facts and the peer reviewed projections for renewables and the energy transition going forward to push the banks towards this clearly profitable option – there would be no risk with that because we all know the transition to mostly renewables and storage is inevitable.

Why do we just need one of the big 4 to make this pledge?

1. This is the real world – and unfortunately there are no other established banks except the big 4 that informally have government guarantee and can survive another major financial crisis without a high probability that a customer of that bank at some point will rock up to an ATM and the computer will say “No” to giving you your money. That’s why we only need 1 of the Big 4 to make that pledge because then a big wave of customers, like me, will come their way.

2. I called Bank Australia last year to try and make the switch and check what was involved, and if you have mortgages totaling less than $250,000 they are not interested in helping you, nor do they offer line of credit facilities backed by equity.

On a side note: I have no time to sit here eloquently choosing my words but USA is at a very unusual and rare crossroads that don’t come about often. Watch that space, because what the Right and Alt Right ‘White Supremacists’ of America have failed to realise is if they take the road leading to internal civil conflict that reaches the point where the hicks get their guns out and America has a lot of those… it’s only probably Russia and few other rogues that will come to their aid… and the rest of the world including most of Europe, Asia, Latin America, and people like me will be supporting the left and centre. The irony is the man that has the capability of creating the situation where in one quick swoop the monopoly of power by the white man is suddenly taken away, is a white man – Trump. A part of me doesn’t want it to get to that stage and another part is getting the popcorn ready!